ARENCORES MAGAZINE Issue |No. 8 (Updated)

The expected dramatic decline in tourist arrivals
this summer in Chania, Crete due to the
pandemic will definitely affect the real estate
market. Signs of structural changes within the
property market are already visible.
Initial evidence from online property rental
ads in the most popular short-term rental
platforms (Airbnb, HomeAway, etc.) shows
a significant fall in demand, in the context
of tourist traffic restrictions. Consequently,
this fact has led to an increased supply of
apartments in Chania Town and Akrotiri area
(Kounoupidiana, Pithari, Korakies) for longterm
rental.
The COVID-19 pandemic brings travel to a
standstill, causing massive job and revenue
losses. Thus, more and more landlords are
moving away from short-term rental to the
traditional long-term rental market. Apparently,
in view of the impact of the pandemic
on tourism, more and more property owners
realise that their revenues are likely to be significantly
reduced in the next months, making
their properties not economically viable assets
in the short-term rental market.
REAL ESTATE
RECESSION?
NOT SO
FAST
AND NOT
FOR ALL
PROPERTY
TYPES
With the shortening of the
tourist season in Crete,
property-owners and property
managers have already begun
moving their properties
from the short-term rental
market – (such as AIRBNB)
to longer-term models.
However, should we expect
a significant correction in
terms of long-term rental
prices or a reduction in the
residential properties selling
prices?
It is a long established fact that a reader will
be distracted by the readable content of a
page when looking at its layout. The point of
using Lorem Ipsum is that it has a more-orless
normal distribution of letters, as opposed
to using ‘Content here, content here’, making
it look like readable English.
It is noted that short-term rentals are a relatively
new practice in Greece and have grown
rapidly in recent quarters, while many landlords
have taken out loans to renovate their
properties for short-term leasing. Falling
rental incomes are putting strains on these
investors’ financial position and debt-servicing
capacity. Longer-term rental agreements
are thus seen as a reliable and economically
viable alternative.
Most of these properties are one or two-bedroom
apartments and they are also rented
furnished and fully equipped and, in most cases,
have been renovated recently. Thus, their
rental prices are typically higher than those
of the large real estate stock in the same area.
In addition, they are mostly located in specific
areas around the centre of Chania city
or near the Technical University of Crete in
Kounoupidiana area and other tourist spots
across the Prefecture of Chania.
The re-shift of apartments from the shortterm
market to the long-term segment, despite
the pressure it will put on rental prices,
is not expected to lead to significant price
adjustments in the selling prices of residential
properties.
35
ARENCORES CHANIA REAL
ESTATE MAGAZINE